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FAQ

The term business simulation game covers a wide range of activities, anything from a card based face to face activity to an interactive online one. It is used to refer to business focused activities designed to develop business acumen and management focused activities designed to improve the way in which an organisation is managed. Our thinking has evolved to define a business simulation game as:

“A device through which individuals learn about how businesses and organisations work, and which enables them to improve

their performance within their organisation through the development of business and/or inter-personal skills.”

The device offers participants a safe environment in which they can make decisions, experience consequences and understand the relationship between the two. It usually focuses on a problem area in which a better outcome could be achieved if people know more or behaved differently.

Some examples of the different types of simulation game can be found in our 10 Step process.

I will break this into two parts. The word game is used to describe activities in which some or all, of these characteristics are prominent:

  • Human, or humanly controlled, opponents, whose actions have an effect, upon each other and upon the environment.
  • An emphasis on competitiveness and ‘winning’.
  • An emphasis on pleasure, humour and enjoyment.
  • A repetitive cycle of making decisions and encountering a result, allowing the hope of improvement and of ‘doing better next time’.

The addition of the word management indicates a focus on planning, management and control of any organisation or project in circumstances where profit is not the dominant measure of success.

A business management game is one that focusses on the planning, management or control of an organisation with an industrial, commercial or financial background.

Please also see our answer to ‘what is a management game’.

This refers to learning that an individual derives from experience. The term comes from the book Experiential Learning: experience as the source of learning and development published by David A Kolb (Englewood Cliffs, Prentice Hall, 1984).

In the book, Kolb explained how a person learns through a cycle of discovery and experience. The Kolb learning cycle has four stages.

In situations where it is difficult for people to gain live experience, the use of games and simulations can be used to mimic reality. The activity provides the active experimentation and concrete experience and the individual can then learn through reflective observation and abstract conceptualisation with the potential of going around the circle again to test out their new-found knowledge.

Retention rates from activities that incorporate experiential methods result in significantly higher retention rates – 75% from practice3 by doing in comparison to 5% from a lecture Research by National Training Laborotries.

Targeted business simulation games are designed to improve knowledge and develop understanding about the business, which in turn leads to more efficient and effective organisations. For your staff members to be effective they need to understand how your business works, what it takes for the organisation to be successful and, crucially, what contribution they need to make to ensure it is operating effectively and efficiently.

A business simulation is one of the most effective learning processes you can employ. The experience develops participants’ business acumen, helping them to understand what the extent of their contribution is, and raising awareness of how their decisions, behaviour and attitudes affect their colleagues. They will learn to make better decisions for the organisation and form better relationships – giving you a more effective, motivated and knowledgeable workforce.

Business simulations and management games promote learning in a stimulating way. They encourage commitment and engagement from every participant, and the hands-on activities improve confidence and skills across the board. Everyone benefits from learning by doing and the lessons really stick. Your participants will experience the impact of their decision-making, whether good or bad, in a risk-free environment. Working as part of a team your participants will also hone their cooperation and communication skills thus improving their management capability, and participants in managerial roles will learn how the component parts of a system are linked, empowering them to make informed decisions which benefit the whole organisation.

Business simulations and management games are interactive and engaging. They increase energy levels and enable your facilitators to assess the competence of the participants. Have they really grasped the important facts and concepts? Will they know what they have to do back in the real world? Your facilitators will also be able to observe individual behaviour and group dynamics as they take part in the simulation game. Do the participants have the skill to convey the new ideas to their teams and work colleagues, and will they be able to implement any changes or adjustments required?

Complementing your other training activities such as flip charts and lectures, the simulation game adds an extra delivery method into the training mix to suit different learning styles and, a bespoke simulation game will be highly relevant to your organisation, so your facilitators will benefit from being able to draw on real examples and experiences to bring the ideas to life and ensure that the learning is applicable to your participants.

A business simulation game will be the highlight of the training event, providing a structured focal point which has your key learning embedded within it.

We gather feedback from every management game and business simulation we design and run. Here’s what our clients say:

  • Active learning keeps our people involved in the whole process.
  • Simulations draw out everyone’s strengths across the group.
  • Learning by experience is fun and interactive, engaging all the senses.
  • Role-playing fosters negotiation and problem-solving skills.
  • Business-specific simulations add real relevance to our events.
  • Our participants retain new information better.

“the increased retention over time of learning appears to be one of the most consistent findings within the research into the potential of games for learning”

Simon Egenfeldt-Nielsen of the University of Copenhagen.

The word game may bring to mind an activity that focusses on pleasure, humour and enjoyment. This does not need to be seen as negative. If participants enjoy participation then they are much more likely to reflect on the experience and apply any learning. Think of our own experience are you more likely to reflect on an experience you enjoyed or one that was unpleasant? It is also important to remember that the content of the activity will always be relevant to the participating group and as such will be useful to them.

Business simulation games can be used as part of both formal and informal assessment activities. If you have a clear understanding of the competencies required and how these would be demonstrated, you can create a checklist to allow observers to assess individuals while they are participating in an activity. A similar checklist can be used by the participants themselves to reflect on their behavior after the event. All our materials come with a generic feedback activity that can be adapted to different situations.

Business simulation games can be used as part of the recruitment or induction process or later for promotion possibilities.

Many business simulation games involved players, individual or in teams, running a fictitious business. The business simulation game can be a generic simulation where the players learn about basic business principles and business or commercial acumen or a bespoke product which relates specifically to one type of business or industry and highlights key aspects of concern.

We have a variety of games that involve participants running their own business.

We hope this answer also helps with the question ‘Games where you own your own business’

All organisations have a structure and processes for their activities. A game can be used to familiaP&O Nedlloyd Induction gamerise new employees with both the structure and the process of the particular organisation. For example, this is a board game which provides new employees joining a shipping company with the process for the main business and also the department (structure) of the business.

Commercial acumen is a subset of business acumen. Business acumen is a combination of knowledge and skill informed by experience: knowledge about key business issues, the skill to apply that knowledge, and the confidence to take action informed by past experiences. Commercial acumen focusses on a smaller number of areas primarily the market in which the organisation operates and the customers it serves. What do they want? It includes knowing something about the competitors so that you can offer potential customers what they want as efficiently and cost effectively as possible. Commercial acumen does not necessarily include the strategic aspects of the company, it’s vision and expansion plans. If focusses more on the actions required today and tomorrow to ensure the organisation is commercially successful.

Many organisations will use the words acumen and awareness interchangeably. We prefer the word acumen because it implies the ability to take action. A person can be aware of a situation but if they are unable to take action then the knowledge is useless.

We hope this answer also helps with the question what is commercial awareness?

 

We define Business Acumen as “The ability to take a ‘big picture’ view of a situation, to weigh it up quickly, make logical, sound decisions confidently, and influence others to agree with you in order to have a positive impact towards achieving the objectives of the organisation.” It is a combination of knowledge and skill informed by experience: knowledge about key business issues, the skill to apply that knowledge, and the confidence to take action informed by past experience.

For more information about Business Acumen please read our White Papers Business Acumen: What is it? Who needs it? How do you acquire it? and Business Acumen: the key to competitive advantage in uncertain times.

Many organisations will use the words acumen and awareness interchangeably.  We prefer the word acumen because it implies the ability to take action. A person can be aware of a situation but if they are unable to take action then the knowledge is useless.

We hope this answer also helps with the question what is business awareness?

A strategy is the pattern of activities that need to be followed in pursuit of a long-term objective. When applied to a business it refers specifically to the actions that will be required by staff, at all levels, to ensure the business achieves the stated goals. The goals may be embodied in a purpose, mission or vision statement or all three.

A business game is a method through which individuals learn about how a business or organisation works. The content of a business strategy game is a business strategy. The game could involve a start-up situation where participants have to create and then implement their strategy reacting to competitor activity as they progress or it could involve taking over an existing business and seeking to implement a strategy that has already been decided.  For example, where a head office or regional unit has decided on the overarching strategy and smaller business units have to implement this in their own environments.

In all cases the game element allows participants to play out various different scenarios and to learn about the potential outcomes in a safe environment.

In today’s society businesses need to show they are accountable for their actions.  They are increasingly judged by customers, staff and other stakeholder groups not just on their overall results but by ‘how they achieved those results’.

In the 2016 Global Reptrak 100 report corporate governance, defined as a responsibly run company, it behaves ethically and is open and transparent in its business dealings, was the second highest driver of overall corporate reputation. A good reputation means that:

  • People are more likely to buy a company’s products.
  • Customers are more likely to say something positive about the Company.
  • Customers are more likely to recommend the company’s products.
  • People are more likely to trust the company to do the right thing.
  • People are more likely to welcome the Company into their community.
  • People are more likely to want to work for the company.
  • People are more likely to invest in the company.

In terms of financial performance those companies with a strong ethical element outperform their counterparts. The graph shows honorees in the world’s most ethical companies compared with the Standard and Poor Index.

Worlds Most Ethical Companies

 

The Institute of Business Ethics defines business ethics as follows.

“Business ethics is the application of ethical values to business behaviour. Business ethics is relevant both to the conduct of individuals and to the conduct of the organisation as a whole. It applies to any and all aspects of business conduct, from boardroom strategies and how companies treat their employees and suppliers to sales techniques and accounting practices.

Ethics goes beyond the legal requirements for a company and is, therefore, about discretionary decisions and behaviour guided by values.”

 

We hope this answers also helps with the question ‘what is business ethics’ and ‘what are ethics in business’.

We interpret this as the application of the organisations rules and standards to decisions that determine how the organisation is perceived by its stakeholders and its ability to maintain stable growth.

Business ethics is the application to a set of values to business issues. We believe that people can become more adept and confident in applying a set of values to business issues through training and development activities. They acquire greater skill. However, for any training to be effective any training needs to be supported by the senior management team. It is also critical that:

  • The values mean something to the individuals who will be using them to guide their decision making.
  • Discussion around the values and how to apply them is encouraged.
  • The training activity needs to be more than a tick box exercise.

When selecting how to conduct any training the use of management simulations and management games deliver greater positive behaviour change and greater learning than other activities such a case studies.

John Kenworthy and Annie Wong – Developing managerial effectiveness: Assessing and comparing the impact of development programmes using a management simulation or management game.

Organisations populated by individuals with strong business acumen will have a shared understanding of the opportunities and threats facing the organisation and will be able to come up with a logical and coordinated response. Every individual’s actions and decisions will be strategically aligned with those of the organisation.

Individuals are able to make appropriate decisions because:

  • They see the bigger picture and understand how each part of the organisation fits together.
  • They have the skills to deal with complexity and uncertainty. They can process the available relevant information and have the confidence to reach a conclusion.

Individuals who possess business acumen will take actions for the benefit of the organisation. For example:

  • Decisions will be made to ensure the best return for any effort expended. This might be a financial investment or the application of man hours to a problem. These actions will influence top-line revenue growth.
  • Individuals will have the knowledge to be able to bridge the communication gap within the organisation by translating the decisions made at higher levels into understandable policies and procedures for their teams.
  • When faced with a complex issue where no solution appears ideal, they will have the skill to analyse the information they do have, the confidence to make rational assumptions to fill in the gaps, and the courage to make a decision. As such the organisation will avoid long periods of inactivity and uncertainty and will have the chance to grab future opportunities – maybe before the competitors!

For more information about Business Acumen please read our white papers Business Acumen: What is it? Who needs it? How do you acquire it? and Business Acumen: the key to competitive advantage in uncertain times.

Business acumen is essential for all senior and middle managers – irrespective of whether they work for a commercial organisation, a Government organisation or in the third sector. The argument is made succinctly by Ram Charan.

“No single aspect of managerial skill is more important. If the management’s assessment of the external landscape, how patterns of converging and diverging trends fit together, is inaccurate, the company’s strategic positioning will be wrong. Decision makers will be tempted to develop the wrong capabilities, hire the wrong people, or enter the wrong markets.”

We believe there is a strong case for all member of an organisation to have a level of knowledge and skill which enables them to take appropriate action. This means that individuals need to be given the opportunity to experience situations which might be outside their immediate sphere of influence, as their actions will ultimately impact on the organisation at some level.

Ram Charan – Sharpening your business acumen

Contact us to set up an initial no obligation meeting over the phone or face to face. We will listen carefully to your requirements, and make suggestions as to how we can take your project to the next stage. Following the meeting we will confirm our understanding of your requirement and offer some initial ideas free of charge.

You can learn more about working with us.

Many of our games and simulations can be used by a competent manager who has, themselves, benefitted from management training. They can be used by trainers working for an organisation or on a freelance basis with the game reinforcing ideas included in their own training materials. If we believe facilitation assistance might be useful, for example for some of our business simulations, we provide this service.

Every client has specific needs, different participant numbers and varying timescales. We will give you a firm quotation early on in the consultative process, and guarantee that your reusable bespoke simulation will deliver an excellent return on your investment.

From initial consultation to delivery, typically between two weeks and two months depending on the type of product required. Our skills in needs analysis mean that we get to the heart of your issue very quickly.

This depends on the type of simulation that you select. For example, participants and/or facilitators may need access to a computer or the web, but in some cases the requirements may be as simple as pen and paper, and a time commitment from each participant.

When we design a simulation game for you, you are involved in the whole process and have a good understanding of how everything works. You can ask us to help facilitate the first event to help you find your feet, run a ‘train the trainer’ session, or provide ongoing facilitation support. If you purchase one of our off the shelf products we will help you to determine the best way to run the game and, depending on the complexity of the package, we can also provide facilitation assistance.

If your goals are to increase commercial awareness, promote teamwork and enhance decision-making skills, take a closer look at the business simulation game the Way Forward. A fast-moving and challenging business simulation, The Way Forward delivers valuable insight into the mechanics of running a business. Developed by us to expose participants to the diverse pressures and challenges of the competitive commercial environment, the simulation tests players over a series of ‘half years’ as they make commercial, cultural and strategic decisions which will make the difference between success and failure. Teams are pitted against each other and strive to achieve the highest share price as the game develops.

We offer this game with facilitation, and also as a web-based version for online participation.

Proof points

“Experiential learning has retention rates of over 50%, much greater than traditional training methods”

Research by National Training Laboratories – White Paper

 

“Using a simulation significantly increases participants enjoyment and perceived usefulness – suggesting that engagement in the learning activity is higher and that practice in using skills in a realistic (simulation) setting is fundamental in transferring learning to the workplace.”

Christine Elgood